He joins the firm from Deutsche Bank where he served as a currency options trader.

Prior to this, Roberts spent five and a half years at NatWest Markets, most recently serving as a FX derivatives trader.

Elsewhere in his tenure at NatWest Markets, he worked as a US rates strategies.

Roberts announced his appointment in a social media post.

This latest appointment follows that of Olivia Gassner, who was appointed VP, equity electronic sales trader at JP Morgan earlier this month.

Gassner joined the firm from RBC Capital Markets, where she served in the same role for three years prior to the move. 

The post JP Morgan taps Deutsche Bank for new FX options trader appeared first on The TRADE.

Algorithms, especially when developed and managed internally, can significantly enhance the front-office tech stack. They reduce costs, lower market impact, and increase execution transparency. While the primary perception is that algorithms help investors execute orders efficiently, there’s much more to it.

For instance, the additional data collected by algorithms offers endless possibilities. Storing order book updates received at millisecond intervals in a well-designed database enables high-level back testing. Additional data also provides accurate transaction cost analysis (TCA) and supports various data science and possible AI-driven applications to improve strategies and execution. 

Moreover, algorithms help better understand the market, providing investment managers with valuable information to make more informed decisions. Placing quants directly at the desk creates a high-performance, hybrid workspace that significantly speeds up implementation and optimisation. This setup ensures that both quants and investment managers learn from each other, potentially creating a new and more capable type of quantitative investment manager. 

Finally, using algorithms makes your organisation more attractive to top quants in the labour market. Talented young professionals are eager to work on challenging data and tech projects where they can develop their own innovative ideas.

Are in-house algorithmic execution platforms the way forward?

When I look at the current state of the market and see all the developments taking place, I believe this will be the way forward. In recent years, the possibilities for developing your own applications have increased enormously. Combined with the rise in tech-savvy talent, this creates the perfect environment for companies in the sector to develop their own in-house execution platforms.

Having the ability to manage, optimise, and implement your own algorithms allows organisations to retain all associated knowledge internally. This not only provides a significant advantage over peers but also prepares your organisation for the rapidly evolving digital future. An execution platform also grants direct market access to several liquidity providers. With the newly unlocked data from the execution platform, it becomes easy to determine where and with whom to execute transactions. Adding new trading venues or banks is quicker and more efficient compared to traditional methods.

Additionally, your organisation can respond swiftly to new market developments to stay ahead. Creating an in-house execution platform also enables you to establish a high-standard risk management and governance framework tailored to your organisation’s needs.

All in all, there are ample reasons and movements within the market to encourage this trend.

How can technology be leveraged in a way that allows traders to execute the same procedures for all FX instruments?

There are numerous ways and opportunities to leverage the vast pool of available technological applications to achieve this. Therefore, there isn’t a single, clear-cut answer to this question. Previously, there was a trend where many technological solutions were purchased by organisations due to a lack of skills and manpower to build them internally. Nowadays, more organisations employ talented and well-qualified individuals who can develop these solutions in-house.

This doesn’t mean that everyone in the sector is building their own applications and tools for all FX instruments. However, there is a noticeable trend of organisations starting to create their own direct market access and/or TCA tools, which shows promise for potentially serving all FX instruments and also the non-FX instruments.

The market still needs to take some steps to make this possible. For example, in the FX Swap market, we are seeing initial moves where parties are providing streaming prices, which could enable the buy-side to develop in-house algorithms for FX Swaps.

For now, technology can be leveraged mainly in the pre- and post-trade procedures to execute the same processes for all FX instruments. Post-trade data for all FX instruments is already widely available, if not already stored by your organisation. This data can be used to create in-house TCA tools or back testing engines for all FX instruments, helping to improve execution.

In short, the possibilities are endless, and it is up to your organisation to determine how to best utilise them.

What are the main barriers when it comes to reaching this goal?

First of all, the technology must be made available to your employees and easily accessible for them to work with. This involves addressing several risk management, security and architectural challenges. Therefore, having a reliable IT partner with a high service level is crucial. Once your IT landscape is in good order and set up according to the highest market standards, you need talented and well-equipped personnel. Fortunately, there has been an increase in tech talent interested in the financial sector, so this should not be too big of an issue.

A bigger challenge might be obtaining internal approvals and managing your in-house developed procedures, applications, and tools for all FX instruments. While creating and testing these technological improvements can be done quickly and easily, getting the business to actually start using them can be more difficult. This means you need to establish a robust and widely supported risk management and governance framework in collaboration with your internal risk management department.

The post In-house algorithmic execution platforms are the way forward appeared first on The TRADE.

Chris Jackson, Yorke O’Leary

OptAxe stated that it is launching the new venue to address fundamental shortcomings in FX options trading.

According to the firm, increased fragmentation in FX trading now presents substantial position distribution and coverage challenges, and places constraints on effective price discovery and execution options.

Elsewhere, the Uncleared Margin Rule and other regulatory requirements mandating initial margining for all trades have raised cost for FX options businesses, with bilateral trading margin requirements heavily impacting balance sheets. 

OptAxes’s solution sources and consolidates the best interest available in the market, in real-time. Axe inventory is aggregated by OptAxes into a single platform, acting as a multi-issuer venue rather than a multi-dealer platform, with RFQ and counterparty disclosure at the point of execution.

“OptAxe is a fully centralised, regulated venue for liquidity discovery, dissemination and execution that empowers trading participants with actionable insights from centralised liquidity information,” said Chris Jackson, chief executive and co-founder at OptAxe.

“We automate manual, bilateral processes and consolidate available axe inventory into a single platform, effectively acting as a multi-issuer, not a multi-dealer platform, RFQ-based venue”. 

The FCA authorisation follows a two-year process from participating in the FCA’s Pathway Programme to gaining a full trading venue licence, compliant with all the regulatory obligations of an MTF, from operational resilience to surveillance, trade reporting and regulatory data reporting.

“With OptAxe, all market participants can easily access a centralised source of actionable axe inventory with evidence-based pricing that meets the demands of the trading community today and tomorrow,” said Yorke O’Leary, chief operating officer and co-founder at OptAxe.

The post OptAxe launches new MTF for FX options appeared first on The TRADE.

Hugh Whelan

The move comes as SGX FX seeks to bolster its liquidity provision and data offering. 

Jean-Philippe Malé, president at SGX FX, said: “[Whelan’s] vision and expertise in building strategic partnerships with liquidity providers and technology service vendors worldwide will be instrumental in this next chapter of our growth. 

“With his proven track-record in FX markets, Hugh is uniquely positioned to lead our efforts in enhancing our platform and expanding the SGX FX franchise globally.” 

Specifically, London-based Whelan will be responsible for overseeing the strategic direction and growth of the liquidity provider client segment. He is also set to develop the data products within SGX FX.

Whelan’s career has had a strong focus on FX markets, having previously led the launch of EBS Direct into a new bilateral FX trading venue – which is now owned by CME Group.  

Speaking to his appointment, Whelan, said: “I am thrilled to join SGX FX at such an exciting time in the company’s growth. I look forward to collaborating with the team to enhance our platform offerings and ensure we maintain a competitive edge in a fast-evolving market.”

The post Former head of CME Group’s EBS Direct joins SGX FX appeared first on The TRADE.

We consider a variety of factors, but pricing quality is first and foremost and cannot be overlooked. Under this idea is a multitude of factors including a constant assessment of bid ask spreads, counting rejects in terms of both absence of pricing and trade rejection, historical performance in terms of currency, size of trades, and importantly, the measure of bank availability in ‘crisis’ i.e. how reliable our liquidity providers are in difficult trading times. When the market is functioning well, spreads are tidy, liquidity is abundant, and quality pricing is easier to find. In those 5% of times when the market is under stress, that’s when we need to know where to look.

Fill ratios and hit rates are also important factors when considering bank performance.

How do you structure your panels?

Our process for LP selection is dynamic, meaning we can adjust our LP panels easily and there is no real lag between analysis and panel adjustment. This flexibility helps us respond quickly to changes and to maintain trading efficiency. We can segment our flow into specific currency buckets based on several characteristics such as currency, groups of currencies, and size. We then decide what tier the trade or groups of trades fit into in terms of difficulty.

Underneath this, we also consider market conditions or the desired outcome for a particular trade. While we have an idea for the number of banks a trade would ideally have, we don’t believe that throwing as many LPs as possible into an aggregator will allow us to achieve an efficient spread.  I think the market now agrees too.

How can you move into the position of ‘preferred customer’ and what benefits can this bring?

We see our relationships with our liquidity providers as partnerships, and we take a strategic approach that emphasises mutual value and long-term partnership. We don’t want or expect our LPs to be the best at everything. We value transparent communication – if you aren’t going to be efficient with GBPUSD but you are going to add value somewhere else, then let’s have a conversation and we can structure our panel accordingly.

As I’ve mentioned before, we place a lot of value on reliability and consistency in both good and bad times. All of this helps to create a more efficient environment. Moreover, the benefit of this mutual understanding is that it fosters the creation of long-term successful relationships and a well-functioning market.

How do you leverage bank relationships to get the best pricing?

We use a combination of engagement and transparent communication to leverage bank relationships to obtain quality pricing. When you reach a point in the relationship where you have regular dialogue, consistent trading volume, and productive use of technology in terms of analytics and execution, then you have a good base for building lasting relationships that support your competitiveness in the market.

The post Dynamic panel structuring is key to maintaining trading efficiency appeared first on The TRADE.

Instantia offers a client-centric way to manage currency exchange, FX strategies, and cross-border payments.

The business also offers a risk management intelligence tool, providing insights to key business decision-makers.

The ION FX solution was chosen by Instantia for its end-to-end processing functionality of FX cash and derivative products, including trade execution and risk management.

“This partnership is crucial as it will help us revolutionise FX by consolidating currency hedging positions into a user-friendly interface and expand into other APAC markets,” said Richard Poulton, chief executive at Instantia.

Using ION APIs, Instantia developed custom client- and dealer-facing user interfaces to enhance the user experience.

Read more: Fireside Friday with… ION’s Edoardo Pacenti

“ION Markets FX is strategically positioned to address the diverse needs of FX market participants. The ION FX end-to-end solution uniquely suits institutions providing FX services for cross-border payments, and FX risk management,” said Alex Pirmohamed, chief product officer at ION Markets (FX).

“Our platform’s robust functionality facilitated Instantia’s quick time to market, and we remain dedicated to supporting their ambitious objectives.”

The post Instantia selects ION FX for trade execution and risk management appeared first on The TRADE.

David Mercer

Together the firms will offer a broader suite of solutions, including expertise in the FX swaps and forwards market, and spot FX and non-FX asset classes expertise. 

“We believe that with the acquisition of FX HedgePool, our combined client base will benefit from access to a wider suite of products and increased global distribution,” said David Mercer, chief executive, LMAX Group.  

“Following this acquisition and that of Cürex last year, we now have a compelling proposition for asset managers and other buy-side participants in addition to serving our core bank, broker and proprietary trading firm segments.” 

LMAX Group and FX HedgePool are focused on providing greater transparency, efficiency and fairness across the FX ecosystem while providing better accesses to institutional grade liquidity, confirmed the firms. 

Currently, FX swaps account for more than half of total daily FX turnover and are the most traded instrument (in excess of $3.8 trillion per day).

This deal follows LMAX’s acquisition of FX-focused execution services and data analytics provider Cürex last year.

Jay Moore, chief executive and founder of FX HedgePool, asserted that “this significant milestone for FX HedgePool and our community marks the start of a period of considerable innovation. The established yet agile, LMAX Group, complements FX HedgePool’s proven ability to introduce groundbreaking solutions for the modern trading desk. 

“Both firms are aligned in delivering innovative products that set new standards for transparency, fairness and efficiency, and we look forward to an exciting future.”

The post LMAX Group acquires FX HedgePool appeared first on The TRADE.

The required skillsets on a buy-side FX trading desk are undergoing significant transformation due to technological advancements. Traditional skills, while still essential, are increasingly supplemented by a robust understanding of data analytics, algorithmic trading and technological tools. Traders are now being expected to possess a strong proficiency in programming languages such as Python, R and SQL to effectively manipulate and analyse large datasets.

Moreover, a solid understanding of statistics and machine learning is becoming crucial. These skills will enable the trading desk of the future to build more predictive models, particularly for enhancing pre-trade mechanics such as liquidity provider or algorithm selection. While these technical skills are becoming increasingly important, it is still vital to have a deep understanding of macroeconomics, market structures and securities pricing. Additionally, maintaining strong relationships with liquidity providers is essential for handling larger orders and keeping up with market trends.

Balancing technical proficiency with market knowledge and maintaining relationships enables traders to navigate the complexities of financial markets effectively.  

What advice would you give to others looking to enter the world of FX trading?

Entering the world of FX trading can be both challenging and rewarding. To succeed, it is important to have a thorough understanding of the underlying financial and macroeconomic principles. In addition, expertise in data analytics and programming languages in general will enable you to perform meaningful analysis and automate trading workflows. These capabilities should be complemented by staying informed about market and regulatory trends as well as building a strong network with sell-side banks, trading platforms and technology providers who can provide valuable insights on various parts of the trading process and can therefore lead to further improvements of whole trading workflows.

FX trading desks are the ideal workplace for individuals who are technically skilled, hungry to learn and have a keen interest in financial markets, regardless of their initial disciplines.

How do you see the make-up of the desk evolving over the next 5-10 years?

The make-up of a buy-side FX trading desk is likely to evolve significantly, mainly driven by technological advancements and changing market dynamics. One of the most notable changes will be the increasing integration of data science and analytics into trading operations. We can expect to see a greater number of data scientists and quantitative analysts working alongside traditional traders. As the role of technology will continue to expand, more advanced trading platforms and pre- and real-time analytics will become the standard tools on the desk. These developments will foster collaboration across different functions, as traders will need to work more closely with especially IT.

The desk will likely see a more diverse mix of skillsets and backgrounds which will enhance the desk’s ability to navigate market challenges and capitalise on new opportunities, ensuring sustained success in the future.

What is the best advice you have been given, or could give, for being effective on an increasingly data-driven desk?

The best advice for being effective on an increasingly data-driven desk is to embrace a mindset of continuous learning and adaptability. Stay curious and proactive in acquiring new skills, particularly when it comes to data analytics and technology in general. Also, cultivate strong collaboration skills. Working closely with other team members or even other departments allows you to leverage diverse expertise and develop in depth knowledge. Effective communication and teamwork can bridge the gap between technical and financial knowledge, leading to potentially better decision-making.

Lastly, maintaining the balance between technical and financial skills is essential. While data provides valuable insights, understanding macroeconomics, geopolitics and market dynamics remains irreplaceable. Combining data-driven analysis with traditional trading acumen will make you a more effective and well-rounded trader.

The post Successful traders combine data-driven analysis with traditional trading acumen appeared first on The TRADE.

Alan Martin Lucero, Gregory Armon-Jones

Specifically, the speakers claimed two sides of a coin – either that the traders of the future will speak the language of software engineering first and foremost (Lucero) or that coding skills will be irrelevant as AI solutions will fill that need and traders will go back to the phones (Armon-Jones). 

The audience vote prior to the discussion swayed 69% in favour of Lucero’s hypothesis, with all to play (argue) for.

“We have a pretty good idea of how the trading desk of the future will look,” asserted Lucero, highlighting that it is only natural for the role of the trader to evolve in the same way Excel has moved on to Python and other tech. 

“Let’s be honest about it, at least for the buy-side asset managers, we’ve become merely algo DJs at this point. We read the room – the mood of the market, we pick a track – the currency pair, and we play the album […] market developments will give rise to a new kind of role, some sort of Jack of all trades and master of none, or master of few – being a market expert alone will probably not be enough.” 

Following this, argued Lucero, these ‘DJs’ will evolve further into conductors of an orchestra of AI.

“The future is exciting, and I think we are going from being just traders to architects of extremely complex workflows. Our value will be largely enhanced going forward.”

Armon-Jones countered that whilst tech is good for repetitive tasks and scalability, when it comes to market hiccups, a human touch and gut feeling remains valuable, asserting that – unfortunately – there is not enough historical data available for every eventuality and that the trader of tomorrow needs to have the experience of yesterday. 

He added: “Traders need to be able to have a view. They need to be able to have a kill switch or have a gut feeling and portfolio managers want to speak to traders, they want to have someone who’s got an edge.” 

However, delving deeper into how volatility could play into each’s respective prediction on the make-up of a future trader, Lucero suggested that going forward, the significant impacts of volatility will be much less of an issue as innovation ramps up.

Read more – Trader and PM relationships: A holistic approach is key to success

[10:50] Annabel Smith

Elsewhere, Armon-Jones, speaking from the headhunter perspective, asserted that many fund managers request macro traders who’ve experienced turbulent markets, if that comes with the smell of “cigarettes and booze”, the more reassuringly human, the better.

Assessing this from a different angle, the panel considered whether the pervasive presence of voice traders is a so-called self-fulfilling prophecy, wherein the traditional trader continually looks to hire people who resemble themselves. 

“A lot of people have made it and part of what we do is we look is look at data […] there are a lot of successful voice traders out there. These guys are valuable because of the market they’ve been covering, they know the ins and outs and know how to play the book,” said Armon-Jones.

Read more – “They’re the perfect trader”

Ultimately, both things can be true – but in an ever more technological market, as always, the unavoidable truth was staring the audience in the face. 

Following a lively debate, Lucero’s argument lost 8% of the vote, however the sentiment of the room indicated the expected, that though the future is full of potential in a world wherein technological innovation can and will never slow down, traders’ roles will indeed be irrevocably changed. However, the human touch factor is unlikely to go extinct.

The post The desk of the future: ‘AI conductors’ vs the traditional trader? appeared first on The TRADE.

Kenza Medjkane

Ramon Puyane, head of FX trading at IMC, explained: “There’s a lot of volume going through FX options and that’s partly driven through interest rate differentials, central bank diverging policy, and a lot of geopolitical unrest.

“The non-banks can have a look at what’s currently happening in FX OTC, which is historically very voice driven, very manual and see how they can leverage their technology to provide liquidity for the end customer either directly through the banks or through multi dealer platforms, agency brokers, that kind of thing.”

Read more: FX derivatives trading can be streamlined through electronification, but data quality must be assured, say experts

When it comes to how the market sentiment is potentially shifting, John Rothstein, UK managing partner and global chief operating officer at Optiver, asserted that it is the new age traders who are most open to alternative liquidity providers, and thus driving potential change.

“I think some of those folks see alternative liquidity providers as very natural, they see use of technology as very natural and so when they’re looking for partnerships, it makes sense that there’s not as much convincing and that alternative liquidity is something that’s [perceived as] additive and valuable to a market […] we’re sort of seeing a turning point.” 

Puyane agreed, highlighting that as the new generation continues to approach alternative liquidity in an ever more natural way, the rate of adoption is likely to increase soon. 

“It’s like a generational shift so it’s going to take time, but we’ve seen quite a decent growth in a relatively short period of time,” he said.

Speaking about her approach from a trader perspective, Kenza Medjkane, senior FX and rates trader at Total Energies, explained that though the firm currently does not use non-bank liquidity for FX options, this move would “probably be soon”.

“Currently we are using mainly OTC through bank providers, but are more and more thinking about non-bank liquidity providers because they are offering better pricing, competitive pricings and maybe more agile platforms as well.”

Expanding on the aspect of how to access non-bank as opposed to bank liquidity in FX options, and how this would differ, Medjkane explained that for banks this is around 60-70% done via voice, however she added that the alternatives offer “some agile services [and] it’s something we’re looking at more and more”.

The post The new generation is seeing FX options through a different lens appeared first on The TRADE.